What's In This Article?
Companies of all sizes have expenses. From travel to office supplies to client entertainment and everything in between, these costs are all part of running a business.
While there is nothing wrong with a “cash system,” this will only take you so far. As your business grows, so will your expenses. For this reason, a business credit card is a must at some point in time.
Once you conclude that a business credit card can benefit your organization, it’s time to answer one essential question:
Which Business Credit Card offer is best for your company?
With hundreds of business credit cards available, you don’t want to choose the first one you come across. Often the bank where you open your business account will have a business credit card offer, but you are not obligated to choose that card.
It is better to compare a minimum of three to five offers, as this will give you a clear understanding of what is available and what best suits your financial situation.
5 Points of Consideration
A quick online search will reveal hundreds of business credit card offers, all of which claim to be the best. Since you are only applying for one card at a time, you need to narrow your options in an attempt to make a final decision.
Here are five points of consideration:
1. Interest Rate
You may have every intention of paying your business credit card balance in full each month, but this doesn’t mean you will always do so.
If you carry a balance from one month to the next, expect to be hit with an interest charge. How much depends on two things: the rate and your balance.
Tip: some business credit cards have a zero percent introductory offer.
Which business credit card is known for providing a high level of service and benefits to its users? Which ones have bad reviews from consumers in your position?
The internet can help you answer these types of questions, as there are hundreds of thousands of business credit card reviews, both from consumers and expert sources.
Don’t put yourself in a detrimental position by selecting a business credit card that has a bad reputation. It could bring more stress to your financial life, which is not something you need. Instead, choose a card that has excellent customer service.
3. Reward Program
If you plan on using a business credit card for regular expenses, you might as well get something in return.
A business rewards credit card allows you to earn points for each dollar you spend. Over time, as points accumulate in your account, you can review the many ways to use them.
The best reward programs allow you to earn unlimited points. Furthermore, it is helpful to find a program with which your points do not expire. This way, you are not forced into redeeming them before you are ready to do so or losing the points entirely.
4. Business Card Fees Are Very Real
Many people overlook the costs associated with a business credit card, as they are too focused on other details, such as the reward program.
Knowing the types of fees, you could incur will allow you to make a more informed decision. Is there an annual fee? Is there a fee for any new cardholders? What is the cost of missing a payment? If you are late with a payment, will they shut down the card?
Before you apply for a business credit card, request a fee schedule – This will give you a clear idea of what types of fees could come to light in the future.
5. How Many Cards do you need?
If you own a small business, you may only need one credit card. But if your business is growing, there is nothing wrong with having a card for one or more of your trusted employees.
When searching for a business credit card, learn more about the fee for adding a cardholder. Along with this, find out if you can receive separate statements for each card, which allows you to track expenses associated with each card easily.
Answer these Questions
Along with the five points of consideration detailed above, there are a few essential questions to answer before applying for a business credit card:
What is most important to you in a credit card?
What is your plan for using the business credit card?
Are you only interested in a particular type of offer, such as one that allows you to earn points?
How are you going to compare the many offers that are available to you?
Is it possible that your business credit score could hold you back from applying for a particular offer?
These are not the only questions to answer when seeking and applying for a business credit card, but they are definitely among the most important.
You are not required to carry a business credit card as a business owner. That being said, the majority of owners use one for convenience and financial benefits.
Before you do anything else, make sure you are 100 percent clear in regards to the types of offers that are available. When you know what is out there, you are in a better position to find one that meets your needs.
The five considerations above will point you in the right direction. When combined with answers to a variety of key questions, you are getting closer to making a selection that will benefit your entire company.
When used appropriately, a business credit card can be a useful tool. Your first job is to apply for the best offer you can find. From there, everything will fall into place.
Our Top Recommendations
The Business Platinum Card® from American Express
This card is perfect for entrepreneurs who frequently travel on the road or in the air. The Business Platinum Card® costs $595 a year, a pretty good deal considering it comes with a lot of benefits: 5x points on flights and hotels on the American Express website, a $200 yearly credit for incidental airline fees, automatic elite status with Marriott and Hilton hotels, and other awesome benefits. New cardholders also get a substantial bonus.
Ink Business Preferred® Credit Card
The Ink Business Preferred® Credit Card pays one of the biggest sign-up bonuses offered on any credit card (worth $1,250 if you redeem the points for travel booked through Chase). Cardholders can earn 3 points per dollar on up to $150,000 a year when they spend on telecommunications, travel, shipping, and advertising on search engines and social media.
Capital One Spark Cash for Business
The Capital One Spark Cash for Business offers unlimited 2% cash back on all purchases, making it a great complement to your other cards. It also comes with a generous sign-up bonus.
Other Types of Credit Cards
Interested in other types of credit cards? Check out these links for more information.